The Intermediary – August 2026 - Flipbook - Page 41
L AT E R L I F E L E N D I N G
Opinion
can boost
income...
away at the available equity until there
is nothing le to pass on.
That hasn’t been the case for years.
Of course, borrowers can allow the
interest to roll up, if they wish, but
there are protections now that did not
exist 30 years ago: no-negative-equity
guarantees, inheritance protection
and the like. Most lenders also let
borrowers service some or all the
interest, or even make ad hoc capital
repayments, so the debt needn’t grow.
It is these outdated notions or
lack of knowledge that stop lifetime
mortgages, and indeed other later life
lending products, being discussed in
the same bracket as downsizing.
Seeing the bigger picture
People frequently make costly
miscalculations in retirement. Maybe
they haven’t saved enough or have
failed to account for tax or inflation,
and they see downsizing as their
fallback option.
But, as the lady in the DWP’s
paper shows, that is not always
possible. Therefore, we – and by that
I mean advisers of all
descriptions, including
mortgage brokers,
IFAs and wealth
managers, as
well as
lenders, pension providers and
policymakers – need beer ways of
helping people think holistically
about their assets.
The pensions dashboard should
help improve how people engage with
retirement planning decisions, but
property wealth must be represented,
otherwise it offers only a partial
picture and invites precisely the
miscalculations that the DWP report
identifies.
Targeted support has a part to play,
too, provided it reaches beyond the
investment and pension silos and
opens a route into advice that takes
housing wealth into account.
Existing mortgage and wealth
advice models must evolve the same
way. Where a firm’s scope is
narrow and its advisers don’t
have the qualifications or
permissions needed
to advise on later
life products, the
FCA should
make clear
its
expectations under Consumer Duty
– specifically that all options should
be considered and that referral routes
to specialists should be put in place
to remove barriers to customers
accessing the solutions that will
deliver the most suitable outcomes for
their needs, wants and circumstances.
Which brings me back to the lady
in the DWP report. Her instinct was
sound. But sadly, her plan didn’t
survive contact with the real world.
Luckily, there is another way: the
lifetime mortgage. However, this lady,
and millions like her, will never know
this alternative exists until awareness
and understanding of the options
improve and truly holistic advice
becomes the norm. ●
